IAG ups investment in car subscription start-up

IAG, already a majority shareholder in Carbar, has further increased its investment in the Australian car subscription company.

The insurer and Seven West Media led in the latest fund-raising exercise held by Carbar, helping it to raise $28.9 million to support its business expansion plans such as catering to the growing use of electric vehicles.

“We’re proud to have partnered with Carbar since 2019 and supported its growth as the pioneer of Australia’s car subscription market,” IAG Group Executive Direct Insurance Australia Julie Batch said.

“Carbar’s world-class digital capabilities have also provided us with the opportunity to evolve with the mobility needs of our customers, who, in the unfortunate event their vehicle is a total loss after an accident, can now source a new or used vehicle through Carbar and have it delivered.

“We’re excited by the opportunities ahead for Carbar and providing the best possible experiences for our customers today and into the future.”

IAG acquired its majority stake in Carbar in 2019 when it participated with other investors to pump in $16.8 million into the Melbourne-founded business, which also offers a platform for selling and buying used vehicles.

Carbar provides subscribers 24/7 roadside assistance Australia-wide in partnerships with NRMA and reciprocal motoring clubs

Carbar says it will use the funds from the latest capital-raising exercise to broaden the business’ marketing, partnership and technology capabilities.

“This round will help us expedite growth in the business and make Carbar a household name,” co-founder and CEO Des Hang said.

“While we are thrilled with our growth to date, we realise that our current round of car subscribers are really early adopters.”

The business is aiming to further scale up its operations in Australia and capitalise on adoption of electric vehicles.

Carbar says its active subscribers have increased more than 2000% since the last capital raise in 2019.

“Given the experience overseas in less car-obsessed markets, we know that with the right push, this trend of subscription can compete with and rival car ownership,” Mr Hang said.

“We’ll be leading the charge on this for the entire car subscription industry.”

Mr Hang says he believes Carbar will play an “instrumental” role in the adoption of electric vehicles across Australia as there are few solutions available presently that will boost accessibility and affordability.

“The global rise of [electric vehicles] is an inflection point for the auto industry,” Mr Hang said. “We want to be a global brand before this trend is fully realised, and in order to do that we need to further accelerate our growth.”